The Mixed-Up Floor Co. Ltd makes two products, carpet polish and floor deodoriser. Operating information from the previous year is as follows.
Fixed costs of $20 000 per year are presently allocated evenly between both products. If the product mix were to change, total fixed costs would remain the same. Assuming everything produced for either product can be sold, how many units of each product should be produced and sold if machine hours are limited to 10 000?

Question

The Mixed-Up Floor Co. Ltd makes two products, carpet polish and floor deodoriser. Operating information from the previous year is as follows. 
Fixed costs of $20 000 per year are presently allocated evenly between both products. If the product mix were to change, total fixed costs would remain the same. Assuming everything produced for either product can be sold, how many units of each product should be produced and sold if machine hours are limited to 10 000?

Quizplus · Accepted Answer

The Answer of The Mixed-Up Floor Co. Ltd makes two products, carpet polish and floor deodoriser. Operating information from the previous year is as follows. 
Fixed costs of $20 000 per year are presently allocated evenly between both products. If the product mix were to change, total fixed costs would remain the same. Assuming everything produced for either product can be sold, how many units of each product should be produced and sold if machine hours are limited to 10 000?